PVH Corp. (NYSE:PVH) reported 2013 third quarter results.
The discussions of results in this release that refer to non-GAAP amounts exclude the items which are described in this release under the heading “Non-GAAP Exclusions.” Reconciliations of GAAP to non-GAAP amounts are presented later in this release and identify and quantify all excluded items.
Overview of Third Quarter Results:
Third Quarter Business Review:
- Earnings per share was $2.30 on a non-GAAP basis, which exceeded the Company’s guidance of $2.25. The prior year’s third quarter non-GAAP earnings per share was $2.38.
- GAAP earnings per share was $2.37 as compared to the prior year’s third quarter earnings per share of $2.27.
- Revenue increased 38% to $2.259 billion, as compared to the prior year’s third quarter. The increase over the prior year was principally driven by the addition of approximately $503 million of revenue related to the Warnaco businesses acquired early in 2013, net of the reduction in licensing revenue attributable to Warnaco. Also contributing to the increase was revenue growth of $87 million, or 10%, in the Tommy Hilfiger business and $55 million, or 19%, in the pre-acquisition Calvin Klein businesses. Partially offsetting these increases was a revenue decrease of $29 million, or 6%, in the pre-acquisition Heritage Brands business.
Due to the 53rd week in 2012, third quarter 2013 comparable store sales are more appropriately compared with the thirteen week period ended November 4, 2012. All comparable store sales discussed in this release are presented on this shifted basis.
Revenue in the Calvin Klein business increased $480 million to $800 million from $320 million in the prior year’s third quarter. $425 million of the increase was attributable to the Warnaco businesses acquired, net of the reduction in licensing revenue attributable to Warnaco. Also driving the revenue increase was strong performance in the North America businesses due to a 3% comparable store sales increase, retail square footage expansion and a double-digit increase in the wholesale sportswear business. The North America underwear business exceeded expectations, while the North America jeans business continued to underperform as the Company works to clear inventory and focus on the redesign and repositioning of its offerings in that product category. Calvin Klein International comparable store sales decreased 1%. The Calvin Klein businesses in Brazil and Asia continued to perform well and exceed expectations, while the European business continued to underperform. Within Asia, the China business exhibited solid growth and the Korea business, although down compared to the prior year, showed improving trends over previous quarters. The Calvin Klein business in Europe remains under pressure primarily due to the Company’s current initiative to restructure the sales distribution mix in this region and its concentration in Southern Europe.